Procurement performance management tool

CONTEXT: Managing your organisation's performance is an integral component of good governance and improving procurement outcomes. The performance management tool provides a basis for continuous improvement and reporting to internal and external stakeholders. The tool lists a number of measures to report against. Areas noted
with 'Y' are suggested as minimum reporting standards for performance management. The greater the number of indicators reported against, the more comprehensive an overview of performance. The tool should be tailored to reflect the specific performance measures applicable to the structure of your organisation and the complexity of
your procurement activities. The tool provides two examples that detail how relevant elements of the tool can be synthesised to present performance measures to internal and external stakeholders.

Suggested performance measures for an organisation to report against

Serial Area Base level Measure Suggested metric Target Data source Accountable officer Suggested metric
measure for Accountable
Officer
1.01 Financial Y Top five categories of spend No metric profile only
1.02 Financial Y Top 10 suppliers by total spend No metric profile only
1.03 Financial Y Summary of procurement complexity (i.e. $ spend under transactional, $ spend under focused) No metric profile only
1.04 Financial Y Procurement savings against annual procurement plan Actual procurement savings/procurement budget Yes
1.05 Financial Total contestable spend for proposed procurement No metric profile only
1.06 Financial Procurement spend by category No metric profile only Yes
1.07 Financial Procurement spend by supplier (i.e. supplier share) No metric profile only Yes
1.08 Financial Y Off-contract spend Off contract spend/spend to date
1.09 Financial Cost of procurement function Cost of procurement function/total procurement spend

2.01 Operational Top 10 procurement-related risks present in the organisation No metric profile only
2.02 Operational List of short-term procurement improvement initiatives and delivery dates No metric profile only
2.03 Operational List of long-term procurement improvement initiatives and delivery dates No metric profile only
2.04 Operational Number of contracts under management No metric profile only
2.05 Operational Contract management load (e.g. resourcing) Number of contracts under management per contract manager
2.06 Operational Y Contracts approaching renewals or expiry Number of contracts due for renewal or expiry in the next three months
2.07 Operational Y Contracts past expiry date Number of contracts expired but still in operation
2.08 Operational Failure to review performance by contract Number of failures to undertake performance reviews/No. of contracts under management
2.09 Operational Value targets included in contracts Per cent of contracts that include KPI targets
2.1 Operational Conflicts of interest Number of COIs declared
2.11 Operational Continuous improvement Number of continuous improvement opportunities implemented/Number of continuous Yes
improvement opportunities identified
2.12 Operational Risk management (Number of high-rated risks) Number of high risks/number of contracts
2.13 Operational Risk management (open issues ageing) Average across contracts: risk open date risk close date (days)
2.14 Operational Y Organisation-wide procurement plan and strategy developed Completion date
2.15 Operational Audit frequency Number of regular audits or independent reviews of procurements against plan Yes
2.16 Operational Y Non-compliance rate Number of issues of non-compliance found by audit rated at or above Medium Yes
2.17 Operational Contract splitting reductions Number of contract splitting occurrences reduced /numberof contract splits identified

3.01 Clients and suppliers Progress towards planned date to report customer satisfaction No metric profile only
3.02 Clients and suppliers Progress towards planned date to report supplier performance
3.03 Clients and suppliers Profile of key customers and assessment of customer satisfaction
3.04 Clients and suppliers Profile poor performing suppliers (based on self assessment)
3.05 Clients and suppliers Customer satisfaction rating Average rating per customer satisfaction index/questionnaire
3.06 Clients and suppliers Supplier performance (maximum of five for top segments) Average supplier performance rating per package (rating out of five)
3.07 Clients and suppliers Supplier reporting Reports received satisfactory on time/number of reports required
3.08 Clients and suppliers Service standard Proportion (%) of services standards met or number of contracts where KPIs are met Yes

4.01 People No. of staff in central procurement team (central and regional personnel) No metric profile only
4.02 People Procurement staff (qualification) Number of procurement staff with procurement accreditation /number of total procurement staff
4.03 People Y Capability assessment of procurement staff completed Completion date to actual date Yes
4.04 People Mandatory conflict of interest and ethics training Per cent of staff who failed to complete mandatory annual COI and ethics training Yes
4.05 People Number of contract managers appropriately trained/skilled Number of contract managers appropriately trained/qualified /number of contract managers
4.06 People Y Procurement team capability Per cent of procurement staff with >7 years procurement experience or professional qualification Yes
4.07 People Y Strategy and structures are in place to address capability, resourcing and training needs Due for completion
4.08 People Number of procurement staff trained for tenders Number of procurement staff trained against procurement plan Yes
 Accountable officer performance dashboard SAMPLE ONLY.
FOR ILLUSTRATION
Insert logo here Month Year ONLY.

1. Financial Target Month YTD Trend Commentary

Savings profile
1.01 Procurement savings against plan 95% 3 $200m

1.03 Total expenditure 95% 3

1.04 Expenditure by category 95% $150m

3

$100m
2. Operational excellence Target Month YTD Trend

2.07 Compliance rate 100% 5

$50m
2.09 Continuous improvement rate 10% a 6

2.13 Audit Frequency 30 3

$m
2.14 Non-compliance rate 10% 6 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11

3. Customer Target Month YTD Trend

3.04 Services standards met 95% 3

Risks and issues ( only risks and issues rated at or above 'high' to be listed)
4. People Target Month YTD Trend
Risk/issue Rating Mitigation action Owner
4.03 Mandatory procurement conflict of interest and ethics training 5% 3

4.04 Number of contract managers appropriately trained/skilled 4 3

4.07 Number of procurement staff trained for tenders 0% 3

On target Trend improving from last period 5

Not meeting target Trend deteriorating from last period 6
Target at risk s Trend unchanged from last period 3
Target not yet available x Data not yet available

Last reporting period Month

Year to date YTD
Trend direction since previous report Trend
 CPO performance dashboard
Insert logo here Month Year

1. Financial Target Month YTD Trend Spend profile

$900m
$900m $250m
1.01 Procurement Savings Against Plan 95% $200m
3
1.02 Contract Variations 5% 3
$600m $100m
1.03 Total Contestable Spend 3 $550m $150m
$150m
$300m
1.04 Procurement spend by category See graphs
1.05 Procurement spend by supplier (i.e. supplier share) See graphs $300m $100m

1.06 Spend by contract segment See graphs $200m

1.07 Category spend against budget 85% 3 $50m

$m
1.08 Off contract spend 2% 6
1.09 Cost of procurement 2% 3 $m
Jul-10 Aug-10 S

2. Operational excellence Target Month YTD Trend

2.01 Number of contracts under management 100% 5
2.02 Contract management load (resourcing) 10% 6
2.03 Contracts approaching renewals or expiry 30% 3
2.04 Contracts passed expiry date 10% 6 Contract by segment
2.05 Failure to review performance by contract 100% 5 % Target Month YTD
2.06 Value targets included in contracts 10% 6 High risk 15 6
2.07 Compliance rate 30% 3 Close to core 40 5
2.08 Conflicts of interest 10% 6 Strategic 25 6
2.09 Continuous improvement 100% 5 Operations 20 5 5 5
2.10 Risk management (no# high-rated risks) 10% 6
2.11 Risk management (open issues ageing) 30% 3
2.12 Organisation-wide procurement plan and strategy developed 10% 6
2.13 Audit frequency 100% 5
2.14 Non-compliance rate 10% 6

3. Customer Target Month YTD Trend

3.01 Customer satisfaction rating 95% 3
3.02 Supplier Performance (Maximum of 5 for top segments) 4 5
3.03 Supplier Reporting 95% 3
3.04 Service standard 85% 3

4. People Target Month YTD Trend Risks and issues ( only risks and issues rated at or above 'high' to be listed)

4.01 Capability Assessment of procurement staff completed 5% 3 Risk/issue Rating Mitigation action Owner

4.02 Procurement staff (qualification) 95% 6

4.03 Mandatory procurement Conflict of Interest & Ethics training 5% 3
4.04 No# of contract managers appropriately trained/skilled 4 3
4.05 Procurement team capability 95% 6
4.06 Strategy and structures are in place to address capability, resourcing and training needs 4 3
4.07 Number of procurement staff trained for tenders 0% 3

On target Trend improving from last period 5

Not meeting target Trend deteriorating from last period 6
Target at risk s Trend unchanged from last period 3
Target not yet available x Data not yet available

Last reporting period Month

Year to date YTD
Trend direction since previous report Trend
CPO performance dashboard SAMPLE ONLY.
FOR ILLUSTRATION ONLY.
Month Year

Savings profile
$200m

$150m

$100m

$50m

$m
Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11

IT and
Travel, food and communications
entertainment Transport,
Vehicles; 7% ; 10%
services; 10% storage and mail Learning and
services; 4% development;
Building and 8%
construction Financial and
supplies; 10% insurance
Management
Public utilities; services; 4%
Office equipment and business Printing and
17%
and supplies; professionals ; supplies; 4%and
Food
5% 11% beverage; 7%
Fuels; 3%

Top 10 suppliers
Supplier Size Category size No. of contracts Total